Asian and European markets fell as tech shares sold off and renewed Iran-Israel strikes pushed oil prices higher before Brent eased back.
Stock markets in Asia and much of Europe fell on Monday as a sell-off in technology shares collided with renewed attacks between Iran and Israel, adding fresh pressure to already uneasy global markets.
The sharpest move came in South Korea, where trading was halted for 20 minutes after the Kospi index dropped nearly 9% within minutes of the open. The index later closed 8.3% lower. Japan’s Nikkei fell 3.9%, while other Asian markets, including Hong Kong’s Hang Seng, Shanghai’s Composite and Taiwan’s Taiex, also ended lower.
European markets were mostly down, though losses were smaller than those seen in Asia. The UK’s FTSE 100 recovered from early weakness to trade slightly higher. In the United States, stocks opened firmer after Friday’s steep declines, with the tech-heavy Nasdaq up 1.2%, the S&P 500 higher by 0.7% and the Dow Jones Industrial Average up 0.2%.
The pressure followed a sharp Wall Street drop on Friday, when the Nasdaq lost about 4% in its biggest fall in more than a year. A stronger U.S. jobs report had raised expectations that interest rates could remain high, or potentially rise further, while persistent inflation concerns continued to weigh on investor sentiment.
Technology shares were at the center of the turbulence. South Korean chipmakers Samsung and SK Hynix fell sharply, with Samsung closing down 10%. Taiwan’s TSMC also dropped 3%. Charu Chanana, chief investment strategist at Saxo, said investors were reassessing whether heavy spending on artificial intelligence is justified by business results. “The burden of proof has gone up,” she said.
Oil prices added another layer of concern. Brent crude jumped 4.6% to $97.34 a barrel in Asian trading after Iran and Israel exchanged strikes for the first time since a ceasefire agreed with the United States in April. Brent later eased to around $94 after Iran said it would stop striking Israel.
Tehran said its attacks were a response to what it called a repeated violation of the ceasefire and warned they could mark the start of a week of strikes. Israel later struck military targets in Iran.
Energy traders have been watching the conflict closely because of its potential impact on oil and gas shipments from the Gulf, including through the Strait of Hormuz. Jiajia Yang of James Cook University in Australia said traders were again pricing in risks to global oil markets and that prices were likely to remain volatile unless diplomacy makes progress.
For now, investors are balancing several risks at once: stretched technology valuations, uncertainty over interest rates and the possibility that conflict in the Middle East keeps energy prices elevated.
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